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This report will discuss the how operations management has an impact upon a large number of categories. Hence the objectives of operations management is wide. This report will try to look at the five major categories of operations management, we will thus look at the major stakeholders that who have interest or participate in the operations of a company.
The foremost are the customers, and to keep them satisfied and delighted must be the goal around which the strategy must be catered to. This report has tried to take the viewpoint of Strategic Performance Measurement (SPM), which can be both functional and dysfunctional for any organization. This is a naturalist tendency around which the entire framework must be executed. SPM can enable organizations to outline as well asattain their tacticalpurposes, bring into lineactivities and approaches it can also include in a basic aspect of unilaterally creating a positive impact on organizational performance which is ultimately, the main target. Though, SPM has also been disparaged for a number of salient reasons that includes reassuringheadstrongbehaviors, stifling improvement and erudition.This will lead to having minimalconsequence on policymaking processes.
This first point made in this report is that operations objectives are very broad. Operations management has an impact on the five broad categories of stakeholders in any organization. Stakeholders is a broad term but is generally used to mean anybody who could have an interest in, or is affected by, the operation. The five groups are:
This is one of the most relevant factor in the list of performance objectives that are guided by stringent timelines. There are number of agencies that believe it to be important for any project to effectively execute. There is a lot of literature that has been brought out about the same. Since the last two decades wherein the picture of how management functions must change.
Quality has been discussed in detail and relevance to one of its relevant meanings which is 'conformance'. This is considered not only relevant to the basic nature of definition of this fuzzy word but it is also related to how services can be delivered at large. This word must take into account how must the product or service executed as per the guidelines or specifications mandated for it.
There are couple of relevant guidelines that determine how the talk around quality must be taken into account. This is also essential to understand how quality must be considered as an important parameter for performance.
There are two effects of a high quality product or service, the first one is related to the external factor or the external effect, this is related to the stakeholders like customers and shareholders being satisfied about the organization’s performance. It is said that the consumers will have far less complains against the product and even better is the case with a delighted customer that will bring word- of mouth publicity. This will also increase the offtake and repeat customers. There will also be more profits and a healthy top-line that will be generated.
Then there is an outlook of looking at the quality from the perspective of an inner outlook. Let us relate this directly with what we discussed above about conformance of quality, when it is high then there are lesser mistakes that come as an impact of such processes and activities. This leads to better reach of the organization. The internal benefits are related to better bottom line results. There is efficiency in place and there are huge cost savings, there is also a sense of dependability and it upsurges. The delay is response is also reduced considerably.
This can be understood from this example, that when we look at operational processes that are frequentlyamendingfaults, it becomes highly difficult to resolve customer complaints since the variability increases.
There are number of definitions of response time and its directly relation to the speed of operations. There are number of cases where a core and a peripheral customer have sufficient delay faced when an order is given and delivered. This lag is called the speed of response or response time. As discussed earlier there are both internal and external factors that govern this phenomenon.
Speed helps in responding to customer issues with minimum time lag, this leads to happy customers. This will lead to increase in the repeat customers, there will also be factors where there will be more returns to a business. Speed is a key differentiator in business where time is crucial and registers money directly. There is a lot of possibility to charge premium prices when services are delivered faster than the industry average.
An example is the delivery services in the country, another related example is the postal services in major countries. There are services in these sectors that charge a premium price due to faster operational efficiency.
The internal effects are related to the reduction in costs which will also be discussed at a later stage. When we discuss the implications of higher speed it culminates into two benefits the first one being reducing the risks and variations and second one is reduction in the inventories.
The example that can be cited here is the relevant for manufacturing sector nut also the services and delivery sector. In case of the service sector of airline travel, if a processing passengers through the terminal gates is done at a quicker rate and with that the seating is done at the opportune time it will lead to reduced costs directly. This stems from the effect of increasing the deployment at the airports which increases the utilization.
We will also look the effect of this increased throughput upon dependability. This will be discussed in the next section. This is explained in the figure below and services
Role of Response Time in Operational Excellence
In case the product, customer and services are trapped this the above vicious cycle the time to respond increases and a greater chance of a data loss occurs. Hence the lag should be avoided thus the variation reduces and hence the dependability increases four-fold.
Dependability in very simple words is being on time and in a number of cases as part of the just in time principle being before time is also not considered healthy and in turn a waste that cannot be recovered. This can be categorized with the help of an understanding that clients always receive the delivery of goods and services on time. This is though a simple notion yet the parameters are difficult to measure.
What should be the estimated time for delivery and in case this delivery fails what should be the estimated time for re-delivery. This related also to questions about servicing these delivery timelines. Then comes the effect of ‘hanging around’. There are several cases of procrastination in such cases.
Dependability and reduced variation is related to reduce variation. This is a classic six sigma case. Clients consider this a good feature in any industry.
It is always consideredirritable to clienteles that their delivery of goods and services is not on the scheduled time and as expected. There are several instances especially with business clients, they always talk about dependability since they can plan ahead effectively.
This is such an important criterion that several vendor contracts are renewed based on the timely promised delivery consideration(Albert and Judd 2006). Thus this will also lead to generating greater revenue and more business for the customers.
The internal effects are related to cost reduction, as already discussed in case the product, customer and services are trapped this the above vicious cycle the time to respond increases and a greater chance of a data loss occurs. Hence the lag should be avoided thus the variation reduces and hence the dependability increases four-fold.
Look at the diagram below, dependability is related to on-time services, it helps execute better plans since they keep variation in their minds. It will also lead to better delivery of products with an error free services.
Role of Dependability in Operational Excellence
This is related to changes in operation with changing time and circumstances (Alawneh and Hattab 2007). This is related to how fast the services can be changed in such cases. Variability in very simple words is being able to adapt and in a number of cases as part of the just in time principle being before time is also not considered healthy and in turn a waste that cannot be recovered. This can be categorized with the help of an understanding that clients always receive the delivery of goods and services on time. This is though a simple notion yet the parameters are difficult to measure.
The external effects are related to the use of flexibility to bring about process changes.\
The external effects are also related to the increased customer satisfaction and delight which will also be discussed at a later stage in the discussion about costs. When we discuss the implications of higher speed it culminates into two benefits the first one being reducing the risks and variations and second one is reduction in the inventories (Albert and Judd 2006).
The internal changes are related to cost structure.There is a cycle of operations that has led to a number of classifications of major disclosures in the study of operations management over the last two decades.
This is a very important factor as far as the overall efficiency and profit and loss statement is concerned. This element has to be taken in consideration with respect to every organization since the cost configuration of every organization varies greatly(Alawneh and Hattab 2007).
There is also a predominantly important factor that governs the above factors and this is related to the overall objective of decreasing cost base. The other four factors are internally configured to achieve this objective. There is a cycle of operations that has led to a number of classifications of major disclosuresin the study of operations management over the last two decades.
It is said that a good management will lead to high quality, excellent response time, and greater dependability and reduced variation with increased flexibility, and this will manage to bring in efficiency by reducing the operational costs.
The above example is about the consumer banking system that leads to immense operational challenges in any banking system. This example is taken from a leading article of Harvard Business Review, and outlines the process improvements that can be taken. There is a business layer of Customer Relation Management on top of the Database layer, even the strategy and operational layers are on top of this layer. This structure can also help in understanding the IT execution as well as determining the operational informational technology and support related activities.
When we look at the effects of Stakeholder engagement in the context of operational management we can see that among a lot of factors this stands out primarily as the single most important factor that affects revenue generation.
We have spoken about all the factors that help in generating better results for the customer when it comes to operational excellence.
Hence the report has tried to relate the operational strategies that must be taken into account while making changes in the execution process of companies.
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